Is There Now An Opportunity In Power Corporation of Canada (TSE:POW)?

Power Corporation of Canada (TSE:POW) saw a decent share price growth in the teens level on the TSX over the last few months. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on Power Corporation of Canada’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Power Corporation of Canada

What is Power Corporation of Canada worth?

Great news for investors – Power Corporation of Canada is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is CA$35.80, but it is currently trading at CA$20.05 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Power Corporation of Canada’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

Can we expect growth from Power Corporation of Canada?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Power Corporation of Canada’s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Since POW is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on POW for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy POW. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Power Corporation of Canada. You can find everything you need to know about Power Corporation of Canada in the latest infographic research report. If you are no longer interested in Power Corporation of Canada, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.